As expected under Obamacare: Insurance Exchange Premiums Through The Roof

[gotbeer]

Rate Shock: In California, Obamacare to Increase Individual Health Insurance Premiums by 64-146%

 

 

In other words, the healthy are getting screwed.

[RallyMo]

Yep, I saw that.

 

Eeessh.

 

The system needs to be blown up.

[Jay]

reality check

[nate]

The problem is that the focus has been on the insurance the entire time.  Not the hospitals and doctors that charge astronomical prices for everything.

[mp170.6]

The problem is that the focus has been on the insurance the entire time.  Not the hospitals and doctors that charge astronomical prices for everything.

 

You bring up a good point... Why haven't people held the insurance companies accountable for driving up the cost of everything? 

 

Several years ago my insurance inundated my doctor with prior authorization paperwork on medications.  The paperwork was staggered for each medication and had to be renewed every 90 to 180 days, which meant this problem repeated itself every month or two for a different medication.  My doctor kindly admitted he couldn't keep fighting them on it.  He logs all of his time and found that over the previous twelve months, he personally spent 50 minutes on the phone (mostly on hold) trying to get my prescriptions approved.  His office staff spent just as much time (if not more) faxing paperwork.  This is totally insane. 

 

A study published a couple years ago surveyed American doctors and found they spent $82,975 per physician per year dealing with insurance companies.  They also found "US nursing staff, including medical assistants, spent 20.6 hours per physician per week interacting with health plans—nearly ten times that of their Ontario [Canada] counterparts."  Again, totally insane. 

 

http://content.healthaffairs.org/content/30/8/1443.abstract

[nate]

Lol, hilarious.  Your constant assertions that health insurance companies want higher prices is insane.

 

Insurance companies work on a 5% margin.  Doctors and hospitals work on 40%+ margins.  Who is the greedy one?

 

Also in order to be competitive, insurance companies re-underwrite groups and individuals at the end of the year and pass on any excess profits as a discount on premiums the next year.

 

Also, every business has administrative costs.  If the providers charged what they contracted with the insurers they wouldn't need the back and forth.  This is what happens.

 

Provider has a contract saying a general visit costs $100.

Provider sends a bill to insurer for $250

Insurer responds with a $100 payment according to contract

Provider amends bill with bogus charges

Insurer rejects charges

 

Happens all the time, doctors slightly alter the care they give you in order to charge something other than the general visit contracted cost.  You would think it is fraud but it isn't.  Insurance companies spend millions of dollars reconciling claims for this reason.

[mp170.6]

Hospitals probably do earn a 40% profit margin (maybe more) but doctors' profit margins are somewhere along the lines of 10-15%.

Profit margins aren't really relevant to the points I raised above, but your comment about their 5% margins reinforces  what I've said previously. Hospitals and insurance companies have no incentive to keep prices low.  Some of this is crony capitalism, some is burdensome government regulation, some is legalized extortion from the taxpayers, and the rest is just regular business practices at work. Every time a hospital or doctor raises prices, the insurance companies must raise premium prices by a disproportionate amount to preserve their 5% profit margin so the shareholders are kept happy.

When you say the provider is adding bogus charges, are you talking about hospitals or doctors in private practice?

Are you aware of the repricing scams providers (hospitals, mostly) and the insurance companies take part in? My understanding is that it works like this:

- Hospital bills $100,000 for short hospital stay that only costs them $15,000.
- Insurance company negotiates the bill down to $35,000 and pays it.
- Hospital then claims a $65,000 "loss" to the IRS as bad debt.
- Insurance company charges the group plan a commission fee for "saving" $65,000 in medical expenses.

As a result, hospitals get a huge tax break to offset much of their price reduction, and the insurance companies reel in additional revenue to offset what they overpaid the hospital.

A win-win for both sides.

[nate]

Again, understand capitalism.  Insurance companies have every need to keep costs low.  For example, we do not make money on groups in the first two years we have them.  Only until the third year do we actually make money.  In order to do that we need to offer the lowest rate and best service.  We cannot offer low rates unless we pay low rates.  Pay attention to what health insurers are doing.  Loaded with healthy living programs.  Smoking cessation, weight loss, etc.  We offer all of these programs to help people be healthier.  Because the more we pay in claims the more it costs us and the more it costs you.

 

You are falling for the same bullshit that the administration fell for, that the insurers are the enemy.  It is not true, we have to be competitive and offer low costs.  We represent the patient, not the doctor.

[mp170.6]

You've convinced yourself that the insurance companies can do no harm. 

 

When I bring up specific items like the $82,975 per physician per year spent dealing with insurance companies, you have no response to that.  It's just one straw man response after another. 

[nate]

82k per year, figure they see what, 20 patients per day?  That is 5200 patients per 5 day work year.  That is 15 dollars per patient in costs.  Hardly breaking the bank.  Like I said, every business has administrative costs.  If Doctors didn't try to charge more than they are contracted for, they wouldn't be paying such high administrative costs.

[mp170.6]

82k per year, figure they see what, 20 patients per day?  That is 5200 patients per 5 day work year.  That is 15 dollars per patient in costs.  Hardly breaking the bank.  Like I said, every business has administrative costs.  If Doctors didn't try to charge more than they are contracted for, they wouldn't be paying such high administrative costs.

 

You really are drinking the Kool-Aid. 

 

$15 per patient per appointment for the insurance company to pay the claim is no big deal?  In other industries it doesn't cost anywhere near this much to file invoices for payment. 

[mtangelsfan]

What do you think they should be charging?  

[nate]

Again, if the doctors followed their contract and submitted their claims electornically, costs would be a fraction of that.

[mp170.6]

What do you think they should be charging?  

 

Who should be charging what?   I'm talking about what it costs doctors annually to get the insurance companies to pay claims.  This doesn't include the insurance company's administrative costs.

 

Nate seems to think it's always the doctors and hospitals who are at fault. 

[nate]

Who should be charging what?   I'm talking about what it costs doctors annually to get the insurance companies to pay claims.  This doesn't include the insurance company's administrative costs.

 

Nate seems to think it's always the doctors and hospitals who are at fault. 

 

Hilarious considering the narrative the entire time has been how evil the insurance companies are.

 

The fact is we charge premiums to our entire business plus 5% profit.  The less the doctors charge the less we charge the patient.  Something most people don't realize is that if they ever get a bill from a doctor that they don't agree with, they will have much more success by calling their insurance company than by trying to take care of it themselves.  We will do whatever we can to try to lower that cost or fight improper charges.  We represent the patient.  Doctors only represent themselves to make more money.

[mp170.6]

Hilarious considering the narrative the entire time has been how evil the insurance companies are.

 

The fact is we charge premiums to our entire business plus 5% profit.  The less the doctors charge the less we charge the patient.  Something most people don't realize is that if they ever get a bill from a doctor that they don't agree with, they will have much more success by calling their insurance company than by trying to take care of it themselves.  We will do whatever we can to try to lower that cost or fight improper charges.  We represent the patient.  Doctors only represent themselves to make more money.

 

Did you even read my posts in this thread?  I've been talking about doctors, insurance companies, and hospitals the whole time.  Never have I focused solely on insurance companies. 

 

You said:  "The less the doctors charge the less we charge the patient"

 

Remember the video I shared about the Surgery Center of Oklahoma?  It's funny you make that claim because insurance companies won't do business with them -- and their prices are 10 times cheaper in many cases.  The insurance companies take approx 10% for administrative costs and 5% profit out of the revenues they receive from insurance premiums. 

 

It's really quite simple when you think about it, the insurance company's 15% chunk would be significantly smaller if cheaper healthcare forced them to lower premium rates.  They don't want that to happen. 

[Vegas Halo Fan]

There is no question that there are doctors who milk the system. Even with state contract physicians, there are those who try it. We had a contract OB-GYN (no longer with us) who almost immediately started complaining about his compensation (which made me wonder why he signed the contract in the first place). First, he tried running labs through his office and passing on the bill to us. The problem was (and we told him this when he was hired) that we have a contract with a laboratory company with negotiated prices that are well below the going market price because of the volume we do.

 

That said, there is probably no single group of businesses that I have less use for than health insurance companies. It is one of the few pure cash businesses left. Policies are deliberately written vaguely so that they can be interpreted more than one way - invariably to the company's benefit. Appeal procedures are window dressing, with the early stages performed by company employees and the latter stages performed by people under contract with the company, with a false implication of impartiality. (Think about it - if they deicided against the company too often, would they be kept?).

 

I am a veteran of what I call the "insurance wars". I have spent far too much time and energy fighting against companies with a profit motive to deny coverage. I had one appeal denied despite a written statement from an emergency physician stating that the proper level of care was sought. Of course, people who are taught to deny claims whenever possible, who have little or no medical training apart from what they parrot back out of their company manuals are far more qualified to decide that than a licensed physician.

 

Normally I don't trust the government to do much of anything. One major reason I support the Affordable Care Act is health insurance companies. I have heard of far too much unscrupulous behavior within them, and this comes from current and former employees. One health insurance company employee I had a chance conversation with said that he had to get away from his company. When I asked why, he said that they were having a party back at the office because a colleague found a technical reason to cancel the policy of a cancer patient, which would save the company thousands of dollars. The employee was given a $5K bonus, and the policyholder was given a death sentence.

 

Allowing companies with a profit motive to control who gets health care and how much, and allowing them to decide after the fact whether the appropriate level of care was sought is at best a laughable system.

[mtangelsfan]

It's an interesting discussion, but I would rather have profit based groups making decisions about healthcare than organizations like the IRS.  

[mp170.6]

I'm no fan of Obamacare and I don't think being for-profit is the problem.

 

The players in the system have zero incentive for efficiency, zero incentive for innovation, and very little incentive to do what's best for the patient because the government shields the existing players from true free market competition.  Obamacare falls to address these shortcomings and makes it ten times worse in some cases. 

 

Walmart of all companies unveiled a plan last year for employees and their dependents to get FREE heart, transplant, and spine surgeries at the Mayo Clinic, Cleveland Clinic, and a few other top hospitals.  No copays and no deductibles.  Walmart has something like 2.2 million employees.  With dependents factored in, this covers maybe 5 or 6 million people.  They obviously have really good bargaining power for cheaper surgery prices, but wait a second...

 

The biggest insurance companies in this country -- which cover 50 to 75 million people each -- have substantially higher bargaining power than Walmart to negotiate the same deals.  So why haven't THEY done the same thing starting about twenty years ago? 

 

It's pretty obvious here that insurance companies are in bed with the hospitals to keep prices high, not low. 

[Vegas Halo Fan]

I'm no fan of Obamacare and I don't think being for-profit is the problem.

 

The players in the system have zero incentive for efficiency, zero incentive for innovation, and very little incentive to do what's best for the patient because the government shields the existing players from true free market competition.  Obamacare falls to address these shortcomings and makes it ten times worse in some cases. 

 

Walmart of all companies unveiled a plan last year for employees and their dependents to get FREE heart, transplant, and spine surgeries at the Mayo Clinic, Cleveland Clinic, and a few other top hospitals.  No copays and no deductibles.  Walmart has something like 2.2 million employees.  With dependents factored in, this covers maybe 5 or 6 million people.  They obviously have really good bargaining power for cheaper surgery prices, but wait a second...

 

The biggest insurance companies in this country -- which cover 50 to 75 million people each -- have substantially higher bargaining power than Walmart to negotiate the same deals.  So why haven't THEY done the same thing starting about twenty years ago? 

 

It's pretty obvious here that insurance companies are in bed with the hospitals to keep prices high, not low. 

 

You make some interesting points. There are definitely those with a vested interest in maintaining the status quo. Fair or not, my mind keeps going back to those 18 executives at Integris Baptist Medical Center in Oklahoma City who make an average of more than $400K per year. And this is just one hospital. I am in a state agency with about 10,000 employees, and the director of the whole thing makes a little more than 25 percent of that. I'm only picking on OKC Baptist because I know the figures on them, but I'm sure that this is duplicated all over the country. We pay more for health care than any country in the world, but our overall outcomes are nowhere near the best. The money certainly isn't eaten up by service delivery. A lot of it goes into executive salaries in hospitals, medical equipment companies, medical supply companies and pharmaceutical companies.

 

Then there is the corruption and unethical behavior in the health insurance industry. Case in point: WellPoint and its subsidiaries routinely target patients with recent diagnosis of breast cancer, automatically auditing them for possible cancellation of insurance in order to save the company money. With the literally dozens of entries on insurance application forms, the chances of an honest mistake, omission or misremembrance are high. WellPoint is taking advantage of this to unethically dump these patients who have not deliberately deceived anyone. Since their policies otherwise obligate them to pay, they look for another way out. This is also being done with other expensive conditions. Some insurance companies give major bonuses to employees who find a way to dump expensive policyholders.

[Lhalo]

Cost of Plantar Fasciotomy Surgery at Oklahoma Surgery Center = $3,080

 

Get Pujols on a plane to OKC now!

[nate]

I'm no fan of Obamacare and I don't think being for-profit is the problem.

 

The players in the system have zero incentive for efficiency, zero incentive for innovation, and very little incentive to do what's best for the patient because the government shields the existing players from true free market competition.  Obamacare falls to address these shortcomings and makes it ten times worse in some cases. 

 

Walmart of all companies unveiled a plan last year for employees and their dependents to get FREE heart, transplant, and spine surgeries at the Mayo Clinic, Cleveland Clinic, and a few other top hospitals.  No copays and no deductibles.  Walmart has something like 2.2 million employees.  With dependents factored in, this covers maybe 5 or 6 million people.  They obviously have really good bargaining power for cheaper surgery prices, but wait a second...

 

The biggest insurance companies in this country -- which cover 50 to 75 million people each -- have substantially higher bargaining power than Walmart to negotiate the same deals.  So why haven't THEY done the same thing starting about twenty years ago? 

 

It's pretty obvious here that insurance companies are in bed with the hospitals to keep prices high, not low. 

 

With all due respect, you have no clue what you are talking about.

 

Doctors, Hospitals, Pharm companies all have much more money than insurance companies.  Again Insurance companies represent the members.  The lower the costs we are charged the lower the insurance rates we can offer to our members.  It is necessary to be competitive.  As healthcare prices have gone up, health insurance company profits have fallen.  Take a look at P&E and stock prices for all the major health insurers over the last five years.

 

Insurance companies contract rates less than the menu you posted online.  Also, like I said, we would cover them under a standard PPO plan but before we can put them in network we have to contract with them and vet them.  We can be hit with malpractice just as easy as a doctor can.  Also, if the office is not willing to work with the insurance company then we cannot put them in network.  That doesn't mean we don't pay the claim, we would just pass more of the responsibility onto the patient.

 

Also, with computers and the internet now, claims are extremely easy to process and maintain now.  The paperwork excuse is just a crock of shit.  More than 90% of file claims are automatically processed.  The ones that aren't is because they show a sign of fraud or a treatment that is out of the norm for the diagnosis.

[mp170.6]

With all due respect, you have no clue what you are talking about.

 

Doctors, Hospitals, Pharm companies all have much more money than insurance companies.  Again Insurance companies represent the members.  The lower the costs we are charged the lower the insurance rates we can offer to our members.  It is necessary to be competitive.  As healthcare prices have gone up, health insurance company profits have fallen.  Take a look at P&E and stock prices for all the major health insurers over the last five years.

 

Insurance companies contract rates less than the menu you posted online.  Also, like I said, we would cover them under a standard PPO plan but before we can put them in network we have to contract with them and vet them.  We can be hit with malpractice just as easy as a doctor can.  Also, if the office is not willing to work with the insurance company then we cannot put them in network.  That doesn't mean we don't pay the claim, we would just pass more of the responsibility onto the patient.

 

Also, with computers and the internet now, claims are extremely easy to process and maintain now.  The paperwork excuse is just a crock of shit.  More than 90% of file claims are automatically processed.  The ones that aren't is because they show a sign of fraud or a treatment that is out of the norm for the diagnosis.

 

Why won't you reply directly to anything that is said here?  Every time it's another straw man response from you. 

 

 

 

Doctors, Hospitals, Pharm companies all have much more money than insurance companies.

 

Collectively, yes, but that's a moot point.  This sounds like a socialist argument.

 

 

The lower the costs we are charged the lower the insurance rates we can offer to our members.  It is necessary to be competitive.

 

Then why don't insurance companies actively seek lower costs?

And let's be honest here, the "competition" in the health insurance industry is not real free-market competition. 

 

 

Insurance companies contract rates less than the menu you posted online.

 

They why are the copays and deductibles for surgical procedures in many cases HIGHER than the cash prices I linked to above? 

 

 

Also, like I said, we would cover them under a standard PPO plan but before we can put them in network we have to contract with them and vet them.

 

Then do it. 

 

Also, with computers and the internet now, claims are extremely easy to process and maintain now.  The paperwork excuse is just a crock of shit.  More than 90% of file claims are automatically processed.  The ones that aren't is because they show a sign of fraud or a treatment that is out of the norm for the diagnosis.

 

Paperwork or electronic work, it makes no difference.  The $82,975 per physician per year spent dealing with insurance companies still stands.  There's about 900,000 active physicians in this country.  Do the math. 

 

$82,975 * 900,000 = $74.6 billion. 

 

This doesn't even include the insurance company's costs and profit.  There's no other industry in the world spending this much money to get paid for their services. 

[nate]

 

Collectively, yes, but that's a moot point.  This sounds like a socialist argument.

 

 

Meaning they have much more power.

 

Then why don't insurance companies actively seek lower costs?

And let's be honest here, the "competition" in the health insurance industry is not real free-market competition. 

 

 

They do seek lower costs!  Why do you think they have networks?  Our in network providers are all providers we have contracted lower rates with.

 

Also, competition not really?  Are you ****ing kidding me?  The competition is insane.  The sales process for a new company with say 500 lives takes months because the broker will negotiate with several insurance companies.  It is extremely competitive.

 

 

Then do it. 

 

 

After vetting if they agree to contracted rates then we would.

 

 

They why are the copays and deductibles for surgical procedures in many cases HIGHER than the cash prices I linked to above? 

 

 

Copays have everything to do with the plan you have picked.  They usually are around 20 dollars per office visit, 50 per urgent care and 100 per ER visit on the HIGH end.  They also only exist on managed care products, meaning plans with strict networks.  Those plans exist as low cost plans.  If you get your care done in network then the costs are covered by the copay.

 

Deductible is the amount of money you pay out of pocket in a plan year before your insurance coverage kicks in.  That is for things other than yearly checkups, etc.  If they charge $3k for a surgery and the deductible is 5000 then you pay out of pocket, if your deductible is 1500 then you only pay that, and the remaining percentage on the other 1500 not covered by the insurance.

 

Again, with all due respect, you have no clue what you are talking about.

[gotbeer]

Affordable Care Act's challenge: getting young adults enrolled

 

 

But that aside.  Here is a question that I was wondering about.

 

Say a person doesn't get insurance, and pays the fine from the government or whatever it is.  Now, he gets hurt, and goes to the ER.  He has no insurance, and can't pay any of it.  

 

So what happens?  Does the government reimburse the hospital?  Or does the hospital have to eat it like they do now?